2013 (8) TMI 488 - SC - Indian Laws

Dishonor of Cheque u/s 138 N.I. Act - Whether the High Court was right in declining the prayer made by the appellant for a direction in terms of Section 427 r.w. Section 482 of the Code of Criminal Procedure for the sentences awarded to the appellant in connection with the cases under Section 138 of the Negotiable Instruments Act filed against him to run concurrently Held that - Court affirmed the direction of the High Court for the sentences to run concurrently - The legal position favours exercise of discretion to the benefit of the prisoner in cases where the prosecution was based on a single transaction no matter different complaints in relation thereto may had been filed as is the position in cases involving dishonour of cheques issued by the borrower towards repayment of a loan to the creditor - the cases against the appellant fall in three distinct categories - The transactions forming the basis of the prosecution relate to three different corporate entities who had either entered into loan transactions with the State Financial Corporation or taken some other financial benefit like purchase of a cheque from the appellant that was on presentation dishonoured -The cases that had culminated in the conviction of the appellant and the award of sentences of imprisonment and fine imposed. Power available to the Court under Section 427(1) of the Code stipulated a general rule to be followed except in three situations - It was manifest from Section 427(1) that the Court had the power and the discretion to issue a direction but in the very nature of the power so conferred upon the Court the discretionary power shall had to be exercised along judicial lines and not in a mechanical, wooden or pedantic manner - It was difficult to lay down any strait jacket approach in the matter of exercise of such discretion by the Courts - There was no cut and dried formula for the Court to follow in the matter of issue or refusal of a direction within the contemplation of Section 427(1). Extension of Concession - There was no reason to extend that concession to transactions in which the borrowing company was different no matter the appellant before us is the promoter/Director of the said other companies also - the direction regarding concurrent running of sentence shall be limited to the substantive sentence only - The sentence which the appellant had been directed to undergo in default of payment of fine/compensation shall not be affected by this direction - the provisions of Section 427 of the Cr.P.C. do not permit a direction for the concurrent running of the substantive sentences with sentences awarded in default of payment of fine/compensation Decided partly in favor of appellant.

Summary

Issues Involved:
1. Whether the High Court was right in declining the appellant's prayer for concurrent running of sentences under Section 427 read with Section 482 of the Code of Criminal Procedure.
2. Determination of the applicability of Section 427(1) of the Code of Criminal Procedure regarding concurrent or consecutive running of sentences.
3. Evaluation of the nature of offenses and transactions to decide on the concurrent running of sentences.

Issue-wise Detailed Analysis:

1. High Court's Decision on Concurrent Running of Sentences:
The appellant, a Director in multiple companies, faced multiple convictions under Section 138 of the Negotiable Instruments Act due to dishonored cheques issued to Haryana Financial Corporation. The appellant sought a direction for the sentences to run concurrently, which the High Court denied. The High Court reasoned that the sentence of simple imprisonment for six months in each case was not excessive and did not warrant concurrent running of sentences.

2. Applicability of Section 427(1) of the Code of Criminal Procedure:
Section 427(1) of the Code of Criminal Procedure provides that subsequent sentences shall commence at the expiration of the previous sentence unless the court directs otherwise. This section grants the court discretionary power to decide whether sentences should run concurrently or consecutively. The Supreme Court emphasized that this discretion must be exercised judicially, considering the nature of the offenses and the specific circumstances of each case. The Court referenced previous judgments, including State of Punjab v. Madan Lal and Mohd. Akhtar Hussain v. Assistant Collector of Customs, to illustrate the principles guiding the exercise of this discretion.

3. Nature of Offenses and Transactions:
The Supreme Court analyzed the nature of the transactions involved in the appellant's cases. The cases were categorized into three distinct groups based on the corporate entities involved and the nature of the financial transactions:
- Loans advanced to M/s Arawali Tubes Ltd.
- Loans advanced to M/s Arawali Alloys Ltd.
- A cheque transaction involving Sabhyata Plastics and the State Bank of Patiala.

The Court concluded that each loan transaction was a separate and distinct transaction. Therefore, the sentences related to dishonored cheques arising from each loan transaction should run concurrently. However, the Court saw no reason to extend this benefit to transactions involving different borrowing companies or the independent transaction with the State Bank of Patiala.

Conclusion:
The Supreme Court partially allowed the appeals, directing that the substantive sentences for cases related to each loan transaction should run concurrently. Specifically:
- Substantive sentences for cases involving Haryana Financial Corporation and Arawali Tubes Ltd. should run concurrently.
- Substantive sentences for cases involving Haryana Financial Corporation and Arawali Alloys Ltd. should run concurrently.
- Substantive sentences between the above two categories and the case involving the State Bank of Patiala should run consecutively as per Section 427 of the Code of Criminal Procedure.

The Court clarified that this direction applies only to substantive sentences and not to sentences in default of payment of fine/compensation.